EU Accounts Fail Audit for 19th Year in a Row

A.B. SANDERSON5 Nov 2014

The Court of Auditors’ report on the EU’s accounts for 2013 has been published this morning and provides further bad news for Brussels.

According to The Telegraph, £5.5 billion of the EU budget last year was misspent because of controls on spending that were deemed to be only “partially effective” by experts. This will rub salt into the wounds of British tax payers who have been told by the European Commission that they need to cough up an additional £1.7bn in membership fees. The Prime Minister has said he will not pay “anything like” that figure but Brits have been told that the Commission will charge £70m a month in interest payments.

The official audit fails to give a clean bill of health to more than £100bn of Brussels spending. £109bn out of a total £117bn spend by the EU in 2013 was ‘affected by material error’ the document says.

Examples of incorrect spending include £1.4 million in funding for ‘social development’ in Moldova “for which no underlying expenditure had been incurred.”

Another project where money was misspent occurred in Spain where EU money was used to buy helicopters to help Spain defend Europe’s borders against entry by illegal immigrants.

“[Auditors] examined a project in Spain which consisted of the purchase of four helicopters, to be used 75 per cent of their operating time for EU border surveillance and control. However, the ECA found the helicopters were only used 25 per cent of the time for this purpose,” said the report.

Both the auditors and the new Budget Commissioner Kristalina Georgieva have called for a culture change to tackle the root problem, pointing the finger of blame at member states where a large amount of the money is spent. And they criticise a culture of ‘use it or lose it’ where a priority was given to funds being spent rather than what it was actually being spent on and if it had any tangible impact.

This focus on national government spending was backed up by the Conservative budget spokesman Richard Ashworth MEP who said: “We regret that no progress has been made on this deep-rooted problem. We welcome the determination of the new commissioner and the comments of the Court of Auditors calling for culture change and greater political responsibility from national governments.”

But we would go further. Conservatives say it is high time the European Parliament took a more active role in the scrutiny of expenditure of taxpayers’ money and MEPs held Commissioners more directly to account for how money is spent on their watch.”

In their annual report for 2013 the auditors conclude that the collection of EU revenue was free from error. However, for EU expenditure the estimated error rate was 4.7 percent (compared with 4.8 percent in 2012). This is an estimate of the money that should not have been paid from the EU budget because it was not used in accordance with EU rules. Typical errors include payments to a company declared as an SME, which is in fact owned by a large company, or making additions to an existing public contract without giving other tenderers a chance to bid.

A spokesman from the Taxpayers’ Alliance said: “How can British taxpayers trust that the money they send to Brussels is being properly looked after when the accounts aren’t given a clean bill of health? Every penny of money that crosses the Channel is a penny that could be spent on essential services at home. Ensuring that Brussels bureaucrats look after UK taxpayers’ money better must be a crucial part of any reform programme.”

And Syed Kamall, leader of the Conservative group in the European Parliament said that the public and press won’t be interested in the mistakes mainly being administrative. “They will be asking why has the EU not signed off its accounts for 20 years” he said.